Apple faces $118,000 fine in China for e-book copyright infringement

A Chinese writers' union brought the case on behalf of three authors.

Apple has been fined 730,000 yuan (about $118,000) in China for copyright infringement. News of the fine came from China Daily News (hat tip to ZDNet), which reported the No. 2 Intermediate People's Court in Beijing ruled against Apple after it determined the works of three authors were sold through the iBookstore without their permission.

This is the second set of cases brought by the Writers' Rights Protection Union against Apple. According to Judge Feng Gang, Apple has a duty to check whether the books by third parties have all the necessary permissions in order to be sold on the iBookstore, in accordance with local laws. It appears as if the books were in fact uploaded by someone else who didn't have permission to publish them, and Apple is the one paying the price.

"The writers involved this time include Mai Jia, whose books are often on best-seller lists across the country," the judge said, according to China Daily. "In this way, Apple has the capability to know the uploaded books on its online store violated the writer's copyright."

But former president of Yahoo China, Xie Wen, was quoted as saying he's skeptical of such an expectation and that companies like Apple aren't likely to change their uploading policies, so infringements like this will inevitably continue.

A lawyer for the three writers in question, Wang Guohua, said the fine was higher than usual, leaving him and his clients pleased with the results. Apple did not comment publicly on the decision.

Interesting that China will take action to respect the copyrights of its native authors but seems to turn a blind eye when it comes to software and media copyrights of others. Specifically in regards to authors, has there been any against Apple or other companies involving Western authors? Or even action against other companies other than Apple for the same thing?

It's not China bringing action against Apple. It's a Chinese Writer's Union representing the interests of it its members bringing action against Apple in a Chinese court so the snark about China protecting copyright, while obvious, is slightly misplaced.

If you want to see blatant copyright infringement, look no further than the Chinese auto industry. They are just so glaring blatant. The S-CEO vs BMW X5 for example is just ridiculous. The worst part is BMW lost the lawsuit. Lets not forget all the other fake garbage from China like sunglasses, apparel, electronics, and I even saw a fake starbucks.

They are just getting more and more bold as well and more and more high tech with their copying.

It's not China bringing action against Apple. It's a Chinese Writer's Union representing the interests of it its members bringing action against Apple in a Chinese court so the snark about China protecting copyright, while obvious, is slightly misplaced.

They won their judgement in a Chinese court, right? How easily is the same opportunity afforded to outside parties?

Obviously, part of this being newsworthy is the mere fact that it is Apple; even while being an underdog, they were newsworthy for being successful despite being the antithesis of typical major corporations. Now that they are top dog, it seems they are a huge target for any sort of criticism. To a point, that's understandable but when do we hold other companies feet to the fire the way we do Apple?

So are these unions going after other companies? I'm under the impression that Kindle does not (yet) operate as a business in China but what about other digital media storefronts? It's a legitimate question.

Are there other parties representing digital media that are filing through the courts in China and having success? China has long been a hotbed of software and media piracy so it would be interesting to know if there is a bias against Apple in this action or if this is just the most visible part of a recent trend in China for cracking down on copyright issues or even IP disputes in general.

My gut instinct says the Apple is being targeted while other companies are ignored and part of the motivation is the amount of money the Apple has and the chance of a settlement or judgement payout. I would love to be proven wrong.

When I was in china, every computer ran a pirated version of windows XP. Every installation included an illegal copy of Microsoft Office. Every college student read textbooks which were printed off at local print shops (all of which openly advertise that they will copy books). Even programs such as funshion and QQMusic, are practically nothing but outright media pirating (most of that media is Chinese, although there is many american movies and music too). Furthermore there are tons of similar Chinese iPhone apps which allow you to read pirated books. Not to mention the cars, clothes, and other junk which are blatant knock-offs. So, every Chinese may steal works from every other Chinese, but as soon as a foreign company accidentally allows a book to be used in an illegal manner they are immediately given a stiff fine. Excuse my language, but this is complete and utter bullshit.

It's amusing how opinions on intellectual property align with self-interest. We have a right to download pirated music, but the Chinese are bad guys for copying American and European technology.

Although I will admit having downloaded pirated music in the past (when I was younger, poorer, and digital storefronts were practically non-existent), I was under no illusion whatsoever that it was a right. Most "piracy" that I know of is still the sneaker-net style where music is "borrowed" from a friend. But I don't know of anyone that considers piracy a "right".

The fact of the matter is, it exists and I think compelling arguments can be made on both sides as to the rightness or wrongness of it.

But, there is a world of difference between a consumer downloading or acquiring pirated or counterfeit goods and companies trafficking in it so your comparison is inapt.

In this specific case, instead of going after the person that made the pirated material on Apple's bookstore, the unions sued Apple directly (and won). This judgement means that Apple has to actively screen EVERY submission to their bookstore in China to verify rights. That is very expensive and will make approvals for submissions slower so even legitimate submissions will suffer. If policy in China is the same as the US, then I believe anyone submitting material has to agree to a waiver confirming they are the copyright holder; that obviously wasn't enough to satisfy the Chinese court here Going forward, to eliminate the risk of further fines, Apple can either make submitters prove beyond a doubt they own copyrights or pull out of doing this sort of business in China altogether. Now, if I'm wrong on the policies involving submissions to Apple bookstore, someone please correct me; I'm not an author so I've never seen the agreement involved.

When I was in china, every computer ran a pirated version of windows XP. Every installation included an illegal copy of Microsoft Office. Every college student read textbooks which were printed off at local print shops (all of which openly advertise that they will copy books). Even programs such as funshion and QQMusic, are practically nothing but outright media pirating (most of that media is Chinese, although there is many american movies and music too). Furthermore there are tons of similar Chinese iPhone apps which allow you to read pirated books. Not to mention the cars, clothes, and other junk which are blatant knock-offs. So, every Chinese may steal works from every other Chinese, but as soon as a foreign company accidentally allows a book to be used in an illegal manner they are immediately given a stiff fine. Excuse my language, but this is complete and utter bullshit.

It's amusing how opinions on intellectual property align with self-interest. We have a right to download pirated music, but the Chinese are bad guys for copying American and European technology.

Although I will admit having downloaded pirated music in the past (when I was younger, poorer, and digital storefronts were practically non-existent), I was under no illusion whatsoever that it was a right. Most "piracy" that I know of is still the sneaker-net style where music is "borrowed" from a friend. But I don't know of anyone that considers piracy a "right".

The fact of the matter is, it exists and I think compelling arguments can be made on both sides as to the rightness or wrongness of it.

But, there is a world of difference between a consumer downloading or acquiring pirated or counterfeit goods and companies trafficking in it so your comparison is inapt.

In this specific case, instead of going after the person that made the pirated material on Apple's bookstore, the unions sued Apple directly (and won). This judgement means that Apple has to actively screen EVERY submission to their bookstore in China to verify rights. That is very expensive and will make approvals for submissions slower so even legitimate submissions will suffer. If policy in China is the same as the US, then I believe anyone submitting material has to agree to a waiver confirming they are the copyright holder; that obviously wasn't enough to satisfy the Chinese court here Going forward, to eliminate the risk of further fines, Apple can either make submitters prove beyond a doubt they own copyrights or pull out of doing this sort of business in China altogether. Now, if I'm wrong on the policies involving submissions to Apple bookstore, someone please correct me; I'm not an author so I've never seen the agreement involved.

So your saying that Apple should have some kind of oversight of what their selling, and profiting from, in their store? Good. They should. If they are going to take their percentage of the profit they should do something besides just collect the money. I believe they call that the "price of doing business".

What's truly ironic is that they won the case against Apple which is notorious for winning BS trademark and copyright cases.

You only have a chance at winning when it's not in a kangaroo court where extralegal considerations like whether the local part boss is in favor or not are the main reasons for a conviction. Clearly not possible in a Chinese court.

This actually looks a lot like Prenda Law's money model. Create something that nobody will buy, wait for someone to try to DL it then sue for damages.

Not sure if it was the same authors, but there have been some stories of Apple ignoring requests by Chinese authors to remove stolen materials from the bookstores. If this is true then Apple certainly deserves losing the suit.

For Music and Video Apple is dealing with large corporations for the most part so the chances of getting stung with copied materials is pretty small, but in the case of the book store like the App store there are a lot of small independent submitters, Apple needs to work up a good method to keep people from uploading copies. One big problem is that people can copy works and up-load them before the legit authors do and make the real authors look like copiers.

It's amusing how opinions on intellectual property align with self-interest. We have a right to download pirated music, but the Chinese are bad guys for copying American and European technology.

there is a world of difference between a consumer downloading or acquiring pirated or counterfeit goods and companies trafficking in it so your comparison is inapt.

In this specific case, instead of going after the person that made the pirated material on Apple's bookstore, the unions sued Apple directly (and won).

You make very good points. What this fine suggests is that China lacks a Safe Harbor-like provision in their law where user-submitted content doesn't create liability for the host, as long as the host reacts promptly to notices of infringement from rightsholders.

While we don't know the particulars of the case, it /does/ strike me as odd, too, in a context where piracy is brazen and rampant. In my opinion, it's because a large corporation provides an immobile target for litigation. It's practically impossible to attack small piracy operators in the developing world, like photocopy shops or music-CD printers. It's a problem of limited law-enforcement resources, unlimited hydra-head-style piracy operations and lack of political will to expend resources defending foreign assets.

I do recognize the difference between content piracy and technological piracy. In the former case, it's difficult to accept that there is really that much lost profit (I would never have bought /any/ of the 12 000 pirated songs I have downloaded). In the latter case, someone is profiting directly from a product that a third party paid to develop. As a software company owner, I would be furious if someone stole my source code and resold my product.

My original comment wasn't meant to be offensive, but merely a remark on how self-interest affects opinions. Where good arguments can be made for or against protection of IP, I find my own hypocrisy amusing. In retrospect, I should have made a more nuanced comment or kept my mouth shut.

So Apple has to pay less than you would, if you went and pirated ~3 songs.

Or one movie. Of course, the whole point of that series of lawsuits (at least these days now) is to turn it into a 2k per user money grab by lawyers with Prenda-like ethics.

But you are correct - Apple -sells- pirated e-books, and profits. Pays 110k fine. Jamie Thomas downloads and/or shares 20 songs for free, hit with 250k fine. Something is either very, very wrong, or perhaps they actually have a better view of copyright and what constitutes legitimate damages than we do over here.

If you want to see blatant copyright infringement, look no further than the Chinese auto industry. They are just so glaring blatant. The S-CEO vs BMW X5 for example is just ridiculous. The worst part is BMW lost the lawsuit. Lets not forget all the other fake garbage from China like sunglasses, apparel, electronics, and I even saw a fake starbucks.

They are just getting more and more bold as well and more and more high tech with their copying.

It's amusing how opinions on intellectual property align with self-interest. We have a right to download pirated music, but the Chinese are bad guys for copying American and European technology.

Because there is a fine line between a person downloading a file and using it at home vs. a company who steals intellectual property to then use it as part of a product to use money. It is no different than the Hackintosh community working together in a forum to get things going vs. a company being set up and providing such a commercial product. There is this thing called nuance - learn it and you might find that things aren't as simple as you make it out to be.

In this specific case, instead of going after the person that made the pirated material on Apple's bookstore, the unions sued Apple directly (and won). This judgement means that Apple has to actively screen EVERY submission to their bookstore in China to verify rights. That is very expensive and will make approvals for submissions slower so even legitimate submissions will suffer. If policy in China is the same as the US, then I believe anyone submitting material has to agree to a waiver confirming they are the copyright holder; that obviously wasn't enough to satisfy the Chinese court here Going forward, to eliminate the risk of further fines, Apple can either make submitters prove beyond a doubt they own copyrights or pull out of doing this sort of business in China altogether. Now, if I'm wrong on the policies involving submissions to Apple bookstore, someone please correct me; I'm not an author so I've never seen the agreement involved.

So your saying that Apple should have some kind of oversight of what their selling, and profiting from, in their store? Good. They should. If they are going to take their percentage of the profit they should do something besides just collect the money. I believe they call that the "price of doing business".

Apple's percentage of the profit comes from proving a storefront and payments system that makes it extremely easy for a consumer to purchase digital goods. Apple handles the distribution, bandwidth, and all aspects of the billing system, including payment, invoicing and even refunds or billing disputes in exceptional circumstances. Plus, customer service regarding any payment or billing activity. So Apple doesn't exactly sit back and just collect the money as you suggest. Now, people can argue a flat 30% is too much (and people will always argue that things should be cheaper) but it's worth noting that distributors handling the same or even less responsibilities across different industries traditionally charged higher percentages, albeit that precedent was set with physical goods. Even Amazon, prior to Apple's iBookstore, had an inverse distribution of profits with them taking approximately a 70% cut and leaving the authors a mere 30%.

And authors still have the option of rolling their own e-commerce and distribution platform in addition to, or instead of Apple's solution if they don't like the fee Apple charges. Established publishers likely already have this in place but most independent publishers would find it prohibitively expensive to build out and staff a digital storefront using a traditional payment gateway and handle all technical and customer support themselves. You have to build a website or pay a web developer to do it (and likely keep them on retainer). Plus pay for a payment gateway. Plus handle support inquiries yourself or hire someone to do that, too. Probably need to pay for AWS or some other cloud storage platform to host your content, esp. if your material is popular. Then, on top of all that, you have to pay for marketing to not only make people aware of your book, but drive them to your website in order to purchase. Being published on Apple or Amazon's marketplace minimizes the expense needed for advertising as consumers are already going there, they don't have to be made aware a one-off website to go and find your wares, plus you stand a chance of being featured on their front page or one of their algorithmically-driven lists if you go about your marketing campaign right. There's a reason digital publishing wasn't a thriving success before companies of Apple and Amazon's ilk came along.

So all things considered, Apple's 30% fee for the services they provide seems reasonable, in context. It's worth noting that Amazon has the same agreement in place, but appears to often sharply cut or entirely eliminate their own 30% fee to drive sales and increase market-share of their Kindle eco-system and they do this often without the author's consent. This often puts Amazon at a loss so they are sacrificing profit for growth, which investors really seem to like.

Now, to put the burden of copyright verification on Apple instead of the submitter, this will likely eliminate the existing agreement Apple has put into place with authors and publishers and Apple can try to contain the added costs within their existing 30%, charge a higher percentage, or have a revised terms and conditions that allow Apple to go directly after the infringer to recoup the costs of any copyright-infringement fines they may be charged with. Given the small likelihood that Apple would be able to recover these fines those who would be engaged with copyright infringement, Apple may just deem it's too risky to work with small independent publishers and authors and require only established publishers and middlemen to operate. The bigger concern is that this shift of policy becomes SOP with Apple outside of just China ... especially if a country with an already established predisposition against Apple (such as France or Italy) follows suit.

It's difficult to know what the outcome of this will be concerning Apple. Maybe they will appeal and win the appeal (if Chinese law allows for that). Maybe they will bail, leaving China without an established digital e-book marketplace of their design (which would hurt all authors and publishers there); is there another e-book marketplace in China that is thriving or is on the rise and doesn't carry the same inherent risks? Maybe Apple will charge more then 30% to publishers AND require that they prove copyright ownership before being published. If so, what sort of proof will be provided? Does China have a national registry of copyrights like the US does? Even with that, sometimes a legal trial is needed to prove copyright (or defend against claims of infringement).

The writers, claiming Apple allows its users to download pirated books through its platform App Store, are determined to fight for their rights, says Bei Zhicheng, an executive of Writers' Union, an organization established in July 2011 to safeguard Chinese writers' copyright online.

Bei said Apple's lack of a positive response to the writers' complaint made them take the case to court.

The company - whose innovative products including iPhone and iPad changed the IT industry - had said the writers failed to provide enough materials and the e-mail they sent in July 2011 was not in line with the format Apple required, according to Bei."

Does this sound implausible to anyone? I tried to find a better-written source, but the gist of it is that these writers saw their own works being sold on the iTunes China store. This wasn't some knock-off app or some vague ownership claim, these were novels with the writers' names in the title. When they tried to get them taken down, they were told "was not in line with the format Apple required." Also, I vaguely recall that the writers did try to get the identities of the infringing uploaders, but Apple wouldn't give those up. If Apple's taking a 30% cut, Safe Harbor doesn't apply and shouldn't. Even though the wrong outcome has been reached so many other times, I won't begrudge what appears to be the right outcome in this case.

I do think that Apple being a Western company with its offices in Beijing, made a target that could be hit, as opposed to innumerable small-scale local thieves in the provinces. But the way that Western companies get hit in China is often just the way Chinese people and companies treat each other.

Lets not forget all the other fake garbage from China like sunglasses, apparel, electronics, and I even saw a fake starbucks.

It's not just China.

We in America and, I guess, the entire west, have been trained to think in terms of IP, copying, etc. But that is actually something new. A couple hundred years ago printers set and printed anything they thought would sell. That was just good business.

That's basically where large parts of Asia are today. It's not a matter of right and wrong. It's just a matter of societal expectations.

When I first went to Korea in 2000, it was almost impossible to find a cup of coffee except for that nasty instant stuff they give you in a paper cup. After an hour on the streets, I found a 7-11 with a half-full, very stale, pot of coffee in the back. It was nasty, but I got my fix.

Not too long after that, maybe 2001 or 2002, I went back and there were Starbucks clones everywhere. I think I might have seen one actual Starbucks at the time, but there weren't many. On the other hand, there were many, many variations along the lines of "Starbox", "Stirbucks", "Star-Bar", and more. you name it. All with a vaguely familiar green logo representing something almost, but not quite, a two-tailed mermaid.

Before we get too huffy, let's note that the USA had interesting copyright protections that basically made it legal for American publishers to pirate *non-American* works if the foreign publishers weren't *very* careful. "Lord of the Rings" was one famous example.

Moreover, if you are a foreign company being sued in an American court (especially in West Texas), you're basically screwed. The juries are happy to make huge (multi-multi-million dollar) awards to those put-upon Americans who suffered at the hands of those nasty foreigners.

Pretty much every country is going to prize the welfare of their own citizens over foreigners in any case where there's even a smidgen of a case to be made. And in the Apple case, I think there was more than a smidgen (although maybe not a huge amount more).

When I was in china, every computer ran a pirated version of windows XP. Every installation included an illegal copy of Microsoft Office. Every college student read textbooks which were printed off at local print shops (all of which openly advertise that they will copy books). Even programs such as funshion and QQMusic, are practically nothing but outright media pirating (most of that media is Chinese, although there is many american movies and music too). Furthermore there are tons of similar Chinese iPhone apps which allow you to read pirated books. Not to mention the cars, clothes, and other junk which are blatant knock-offs. So, every Chinese may steal works from every other Chinese, but as soon as a foreign company accidentally allows a book to be used in an illegal manner they are immediately given a stiff fine. Excuse my language, but this is complete and utter bullshit.

Wow, you just completely described my college days...everyone was running a "free" version of WinXP and every other expensive software. Adobe, AutoDesk, 3DSMax, Office, games, everything. All the students passed around a CD with a hack on it. We were all downloading off of Napster, Morpheus, Limewire, and then eventually Torrent. People were scanning textbooks into PDF and HTML and made it searchable and available. Seriously. If you didn't do all of this in college, then either you're really old, or you had rich parents. Personally, I think it's great that they are bringing information to the masses. You've obviously never been to China, or at least seen the gap between the "haves" and the "have-nots". If even a single kid living in poverty gets the chance to go on the web and read a "pirated" textbook in order for Apple to lose $118K...I say it's worth it. I will take that any day. It means one day that kid might get a real job and pay it back to Apple by buying an iPad.

Lets not forget all the other fake garbage from China like sunglasses, apparel, electronics, and I even saw a fake starbucks.

It's not just China.

We in America and, I guess, the entire west, have been trained to think in terms of IP, copying, etc. But that is actually something new. A couple hundred years ago printers set and printed anything they thought would sell. That was just good business.

That's basically where large parts of Asia are today. It's not a matter of right and wrong. It's just a matter of societal expectations.

When I first went to Korea in 2000, it was almost impossible to find a cup of coffee except for that nasty instant stuff they give you in a paper cup. After an hour on the streets, I found a 7-11 with a half-full, very stale, pot of coffee in the back. It was nasty, but I got my fix.

Not too long after that, maybe 2001 or 2002, I went back and there were Starbucks clones everywhere. I think I might have seen one actual Starbucks at the time, but there weren't many. On the other hand, there were many, many variations along the lines of "Starbox", "Stirbucks", "Star-Bar", and more. you name it. All with a vaguely familiar green logo representing something almost, but not quite, a two-tailed mermaid.

Have to agree... and I'd like to add that more than thinking in terms of IP and copying, it's brand recognition. We in the West notice labels and logos first. People scoff at advertisements and marketing but there's a reason companies are willing to pour big bucks into it... it works.Is there any real reason Starbucks gets the notoriety that it does? No, not really. They have horrible to mediocre-at-best coffee, but they do have a very well marketed and recognizable logo.